Will Carriers Battle Apple in 2013?

The iPhone's status as the most in-demand smartphone has allowed it to collect selling prices far above rival high-end smartphones. That's crimped margins for carriers like AT&T, Verizon, and Sprint. With T-Mobile making noise over reducing carrier subsidies, the natural next step is to think about whether other carriers will attempt to eliminate subsidies or curb their costs. Will carriers fight the heavy subsidies enriching Apple (NASDAQ: AAPL  )  and pinching their bottom lines?

In the video below, Motley Fool technology analyst Eric Bleeker explains why pushing back on phone subsidies is easier said than done. As Eric explains, as we've seen in other markets, companies that continue subsidizing phones tend to begin gaining large chunks of market share. That means in a market like the United States, even if two larger players like AT&T and Verizon were to push back on subsidizing phones, it'd create an opportunity for Sprint to promote cheaper phones as a means of gaining share. To see Eric's full thoughts, make sure to watch the video.

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  • Report this Comment On January 02, 2013, at 10:32 PM, TechnoHistorian wrote:

    TWO QUESTIONS: (1) What portion of what the carriers pay to Apple do these carriers pass on to their customers in monthly billings? (2) What portion of their revenues as a whole come from they overall growth in their businesses during the past five years as a result of Apple's pioneering smart phones and tablets? I suspect that the carriers have made billions and billions off of service fees to users of Apple devices and Apple imitator devices and passed on the cost of hardware subsidies to their customers!

  • Report this Comment On January 04, 2013, at 2:41 AM, RussellL wrote:

    Samsung phones are for Tim Cook?

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